OCTOBER TERM, 1997
Syllabus
AIR LINE PILOTS ASSOCIATION
v. MILLER ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE
DISTRICT OF COLUMBIA CIRCUIT
No. 97-428. Argued March 23, 1998-Decided May 26,1998
Petitioner Air Line Pilots Association (ALPA or Union), a
private-sector labor organization covered by the Railway Labor Act
(RLA), represents, as exclusive bargaining agent, pilots employed
by Delta Air Lines (Delta). The collective-bargaining agreement
between ALPA and Delta includes an "agency shop" clause that
requires nonunion Delta pilots to pay ALPA a monthly service charge
for representing them. For 1992, the first year ALPA collected an
"agency fee" under the agency-shop agreement, the Union ultimately
determined that 19 percent of its expenses were not germane to
collective bargaining. Accordingly, ALPA collected an agency fee
that amounted to 81 percent of its members' dues. Alleging that the
Union had overstated the percentage of its expenditures genuinely
attributable to "germane" activities, respondents, 153 Delta
pilots, challenged in this federal-court action the manner in which
ALPA calculated agency fees. Under ALPA's "Policies and Procedures
Applicable to Agency Fees," adopted to comply with the "impartial
decisionmaker" requirement set forth in
Teachers v.
Hudson, 475 U.
S. 292, 310, pilots who object to the fee calculation may
request arbitration under procedures devised by the American
Arbitration Association (AAA). When 174 Delta pilots (including 91
of the respondents) filed timely objections to the 1992 agency-fee
calculation, ALPA treated the objects as a request for arbitration
and referred them to the AAA for resolution in a single,
consolidated proceeding. The arbitrator declined to stay the
arbitration in deference to the court proceeding, and sustained
ALPA's calculation in substantial part. The District Court then
granted ALPA's motion for summary judgment, concluding,
inter
alia, that pilots seeking to challenge the fee calculation must
exhaust arbitral remedies before proceeding in court. Reversing,
the Court of Appeals found no legal basis for requiring objectors
to arbitrate agency-fee challenges when they had not agreed to do
so. Having determined that the arbitrator's decision was no longer
part of the legal picture, the appellate court remanded the case to
the District Court.
Held: When a union adopts an arbitration process to
comply with
Hudson's "impartial decisionmaker" requirement,
agency-fee objectors who have not agreed to the procedure may not
be required to exhaust the
867
arbitral remedy before challenging the union's calculation in a
federalcourt action. Pp. 872-880.
(a) Section 2, Eleventh, of the RLA allows employers and unions
to conclude agency-shop agreements. Under such arrangements,
nonmembers must pay their fair share of union expenditures
necessarily or reasonably incurred in performing the duties of an
exclusive employee representative dealing with the employer on
labor-management issues.
Ellis v.
Railway Clerks,
466 U. S. 435,
448. To avoid constitutional shoals, however, fee objectors cannot
be compelled to pay costs unrelated to those representative duties.
See,
e. g., id., at 448-455. In
Hudson, a
public-sector case in which limitations on the use of agency fees
were prompted directly by the First Amendment, the Court held that
unions and employers must provide three procedural protections for
nonunion workers who object to the agency-fee calculation:
sufficient information to gauge the fee's propriety, 475 U. S., at
306; "a reasonably prompt opportunity to challenge the amount of
the fee before an impartial decisionmaker," id., at 310; and the
escrowing of any amount of the fee "reasonably in dispute" while
the challenge is pending,
ibid. Pp. 872-874.
(b) The parties have not challenged the Court of Appeals'
determination that
Hudson's safeguards transfer fully to
employment relations governed by the RLA. Accordingly, the Court
turns to the question whether agency-fee objectors must exhaust
Hudson's "impartial decisionmaker" procedure before pursuing
their claims in federal court. The Court answers that question
"no," and rejects ALPA's request to extend the discretionary
exhaustion-of-remedies doctrine, see
McCarthy v.
Madigan, 503
U. S. 140, 144, to agency-fee arbitration. A principal purpose
of that doctrine-allowing agencies, not courts, to have primary
responsibility for the programs that Congress has charged them to
administer, see id., at 145-is not relevant here: ALPA seeks
exhaustion of an arbitral remedy established by a private party,
not of an administrative remedy established by Congress. As a rule,
arbitration is a matter of contract, and a party ordinarily cannot
be required to submit to arbitration any dispute which he or she
has not agreed so to submit.
E. g., Steelworkers v.
Warrior &
Gulf Nav. Co., 363 U. S. 574, 582. ALPA,
it is true, acted to comply with
Hudson rather than out of
its own unconstrained choice. But the purpose of
Hudson's
"impartial decisionmaker" requirement is to advance the swift,
fair, and final settlement of objectors' rights, see 475 U. S., at
307, not to compel objectors to pursue arbitration. The Court
resists reading
Hudson in a manner that might frustrate its
very purpose. ALPA's assertion of the efficiency served by
requiring objectors to proceed first to arbitration, thereby
gaining definition of the scope of the dispute, overstates
868
the difficulties entailed in holding a federal-court hearing
without a preparatory arbitration, and is answered by conscientious
management of the pretrial process to guard against abuse, not by a
judicially imposed exhaustion requirement. Genuine as the Union's
interest in avoiding multiple proceedings may be, that interest
does not overwhelm objectors' resistance to arbitration to which
they did not consent, and their election to proceed immediately to
court for adjudication of their federal rights. pp.874-880.
108 F.3d
1415, affirmed.
GINSBURG, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and O'CONNOR, SCALIA, KENNEDY, SOUTER, and
THOMAS, JJ., joined. BREYER, J., filed a dissenting opinion, in
which STEVENS, J., joined,
post, p.880.
Jerry D. Anker argued the cause and filed briefs for
petitioner.
Raymond J.
Lajeunesse, Jr., argued the cause for
respondents. With him on the brief was
Philip F.
Hudock.*
JUSTICE GINSBURG delivered the opinion of the Court. An
"agency-shop" arrangement permits a union, obliged to act on behalf
of all employees in the bargaining unit, to charge nonunion workers
their fair share of the costs of the representation. The purposes
for which a union may spend the "agency fee" paid by nonmembers,
however, are circumscribed by the First Amendment (when public
employers are involved) and the National Labor Relations Act (NLRA)
or Railway Labor Act (RLA) (when private employers subject to their
provisions are involved). In
Teachers v.
Hudson,
475 U. S. 292
(1986), we held that the First Amendment requires public-employee
unions to accord workers who object
*Briefs of
amici curiae urging reversal were filed for
the American Federation of Labor and Congress of Industrial
Organizations by
Jonathan P. Hiatt, James B. Coppess, and
Laurence Gold; and for the National Education Association by
Robert H. Chanin and
Jeremiah A. Collins.
Frank T. Mamat, J.
Walker Henry, and
George M.
Mesrey filed a brief for the Mackinac Center for Public Policy
as
amicus curiae urging affirmance.
869
to the agency fee "a reasonably prompt opportunity to challenge
the amount of the fee before an impartial decisionmaker."
Id., at 310.
Petitioner Air Line Pilots Association (ALPA or Union), a
private-sector labor organization covered by the RLA, acknowledges
that it is bound by
Hudson. ALP A endeavored to comply with
Hudson's "impartial decisionmaker" requirement by referring
all fee disputes to a neutral arbitrator. In the action now before
us, nonunion pilots challenged the agency fee collected by the
Union in 1992. ALPA urged that the challengers must exhaust the
arbitration process before pursuing judicial remedies. The Court of
Appeals for the District of Columbia Circuit held that the pilots
resisting the agency fee may proceed at once in federal court. We
hold, in accord with the Court of Appeals, that employees need not
submit fee disputes to arbitration when they have never agreed to
do so.
I
ALP A represents, as exclusive bargaining agent, pilots employed
by most United States commercial air carriers, including Delta Air
Lines (Delta). In November 1991, ALPA and Delta amended their
collective-bargaining agreement to include,
inter alia, an
"agency-shop" clause. That clause, similar to provisions in ALP A's
agreements with other carriers, required each pilot who was not an
ALP A member to pay the Union a monthly "service charge as a
contribution for the administration of [the collective-bargaining
agreement] and the representation of such employee." App. 31.
On December 12, 1991, five Delta pilots filed this action
against ALP A and Delta in the District Court for the District of
Columbia. Their complaint charged that the "agency-shop" clause was
unlawful on its face. (Three of the original plaintiffs, plus 150
Delta pilots who subsequently intervened, are respondents here; the
other two original plaintiffs were dismissed from the case for
reasons unrelated to the issue we resolve. Delta was also dismissed
from the
870
case on grounds not pertinent here.) The pilots unsuccessfully
moved for a preliminary injunction against implementation of the
agency-shop arrangement, and ALPA began collecting agency fees on
January 1, 1992.
In 1992, ALP A charged its members monthly dues of 2.35 percent
of each pilot's earnings. The Union ultimately determined, in its
final, audited "Statement of Germane and Nongermane Expenses"
(SGNE) for 1992, that 19 percent of ALP A's expenses for that year
were not germane to collective bargaining. Accordingly, the Union
adjusted fees charged nonmembers to equal 81 percent of the amount
members paid.
On October 8, 1992, some months after the Union had begun to
collect agency fees, the pilots moved to amend their complaint to
add a count challenging the manner in which ALPA calculated the
fee. They alleged,
inter alia, that ALP A had overstated the
percentage of its expenditures genuinely attributable to "germane"
activities. The District Court granted the motion to amend on
August 2, 1993. The pilots' original facial challenges to the
agency-shop clause were later resolved in the Union's favor on
summary judgment (a matter the pilots did not contest on appeal).
Thus, the challenge to the 1992 agency-fee calculation is the only
claim before us.
Under ALPA's "Policies and Procedures Applicable to Agency
Fees," pilots who object to the fee calculation may request
arbitration under procedures the American Arbitration Association
(AAA) devised to resolve such disputes.
Id., at 69-70. One
hundred seventy-four Delta pilots filed timely objections with the
Union after receiving the 1992 SGNE. ALPA treated those objections
as requests for arbitration and referred them to the AAA. On
October 15, 1993, the AAA appointed an arbitrator to resolve the
objections in a single, consolidated proceeding.
The objectors included 91 of the 153 pilots who are respondents
here. (The other 62 respondents intervened in
871
the lawsuit but were not parties to the arbitration.) Preferring
to pursue their challenges to ALPA's agency-fee calculation in the
context of their ongoing federal-court action, the
respondent-objectors asked the AAA to suspend the arbitration. The
AAA referred that request to the arbitrator, who declined to defer
to the federal-court litigation.
Id., at 106. After the
District Court denied a motion to enjoin the arbitration, id., at
111-114, respondents' counsel entered a "conditional appearance" in
the arbitral proceedings. The arbitrator held hearings in January,
February, and March 1994. He ultimately sustained the Union's
agency-fee calculation in substantial part, although he concluded
that "nongermane" expenses made up 21.49 percent of the union's
budget, not 19 percent as the Union had determined. App. to Pet.
for Cert. 71a-115a, 158a-161a.
After the arbitrator issued his decision, ALP A moved for
summary judgment in the federal-court action. Granting the motion,
the District Court concluded that pilots seeking to challenge the
Union's agency-fee calculation must exhaust arbitral remedies
before proceeding in court.
Id., at 26a31a. Accordingly, the
court held, the 62 respondents who did not join the arbitration
were bound by the arbitrator's decision.
Id., at 32a. The
other 91 respondents, the District Court ruled, qualified for
clear-error review of the arbitrator's factfindings and
de
novo review of all legal issues.
Id., at 31a.
Determining that the arbitrator had committed no error of law or
clear error of fact, the court sustained his decision.
The Court of Appeals for the District of Columbia Circuit
reversed.
108 F.3d
1415 (1997). That court found "no legal basis" for requiring
objectors to arbitrate agency-fee challenges unless they had agreed
to do so (as respondents had not).
Id., at 1421 (emphasis
deleted). It therefore concluded that "the arbitrator's decision
[was] no longer a part of the legal picture," and for that reason
the case "must be remanded."
Id., at 1422. We granted
certiorari, 522 U. s.
872
991 (1997), limited to the question whether an objector must
exhaust a union-provided arbitration process before bringing an
agency-fee challenge in federal court, a matter on which the Courts
of Appeals have reached differing conclusions.1
II A
Because Delta is a "common carrier by air engaged in interstate
or foreign commerce," 45 U. S. C. § 181, the RLA governs its
bargaining relationship with ALP A. Section 2, Eleventh, of the RLA
allows employers and unions to conclude agency-shop agreements.2
The statutory authorization for such agreements aims to resolve the
problem of "free riders-employees in the bargaining unit on whose
behalf
1 Compare
Lancaster v.
Air Line Pilots Assn.
Int'l, 76 F.3d
1509, 1522 (CAlO 1996) (exhaustion of arbitral remedy
required), with
Knight v.
Kenai Peninsula Borough School
Dist., 131 F.3d
807, 816
(CA9 1997) (exhaustion not required), and
Bromley v.
Michigan Ed. Assn.-NEA, 82
2 The RLA, § 2, Eleventh, as added by 64 Stat. 1238, 45 U. S. C.
§ 152, Eleventh, provides in pertinent part:
"Notwithstanding any other provisions of this chapter, or of any
other statute or law of the United States, or Territory thereof, or
of any State, any carrier or carriers as defined in this chapter
and a labor organization or labor organizations duly designated and
authorized to represent employees in accordance with the
requirements of this chapter shall be permitted-
"(a) to make agreements, requiring, as a condition of continued
employment, that within sixty days following the beginning of such
employment, or the effective date of such agreements, whichever is
the later, all employees shall become members of the labor
organization representing their craft or class:
Provided,
That no such agreement shall require such condition of employment
with respect to employees to whom membership is not available upon
the same terms and conditions as are generally applicable to any
other member or with respect to employees to whom membership was
denied or terminated for any reason other than the failure of the
employee to tender the periodic dues, initiation fees, and
assessments (not including fines and penalties) uniformly required
as a condition of acquiring or retaining membership."
873
the union [is] obliged to perform its statutory functions, but
who refus[e] to contribute to the cost thereof."
Ellis v.
Railway Clerks, 466 U. S. 435, 447
(1984). Under agencyshop arrangements, nonmembers must pay their
fair share of union expenditures "necessarily or reasonably
incurred for the purpose of performing the duties of an exclusive
representative of the employees in dealing with the employer on
labor-management issues."
Id., at 448. To avoid
constitutional questions that might arise were we to adopt a
contrary interpretation of the RLA, however, we have held that
costs unrelated to those representative duties may not be imposed
on objecting employees. See
id., at 448-455; see also
Railway Clerks v.
Allen, 373 U. S. 113, 121 (1963)
(§ 2, Eleventh, distinguishes between "the union's political
expenditures," to which nonmembers may not be compelled to
contribute, and expenditures "germane to collective bargaining," to
which they may);
Machinists v.
Street, 367 U. S. 740, 768-769
(1961) ("§ 2, Eleventh is to be construed to deny the unions, over
an employee's objection, the power to use his exacted funds to
support political causes which he opposes"); see also
Communications Workers v.
Beck, 487 U. S. 735, 762-763
(1988) (same limitations apply under NLRA).
A similar rule-based explicitly on the Constitution-applies to
public-sector employment. In
Abood v.
Detroit Bd. of
Ed.,
431 U. S.
209, 232 (1977), we upheld the constitutionality of agency-shop
agreements made by government employers with their workers'
exclusive bargaining representatives. As the Court explained,
imposition of agency fees under the RLA "is constitutionally
justified by the legislative assessment of the important
contribution of the union shop to the system of labor relations
established by Congress," and "[t]he same important government
interests ... presumptively support" agency-shop arrangements in
the public sector.
Id., at 222, 225.
The agency fees assessed from nonmembers, we said in
Abood, may be "used to finance expenditures by the Union
874
for the purposes of collective bargaining, contract
administration, and grievance adjustment."
Id., at 225-226.
We cautioned, however, in view of the presence of state action,
that objecting employees have a First Amendment right to "prevent
the Union's spending a part of their required service fees to
contribute to political candidates and to express political views
unrelated to its duties as exclusive bargaining representative."
Id., at 234. In
Lehnert v.
Ferris Faculty
Assn., 500 U. S.
507, 519 (1991), we relied on both publicsector and RLA cases
to hold that agency fees assessed by public-employee unions "must
(1) be 'germane' to collectivebargaining activity; (2) be justified
by the government's vital policy interest in labor peace and
avoiding 'free riders'; and (3) not significantly add to the
burdening of free speech that is inherent in the allowance of an
agency or union shop."
In
Hudson, a public-sector case, we held that the First
Amendment required unions and employers to provide procedural
protections for nonunion workers who object to the calculation of
the agency fee. Three safeguards, we declared, are essential to
"minimize the infringement" on nonmembers' rights and provide
workers with "a fair opportunity to identify the impact of [the
agency-fee assessment] on [their] interests,"
Hudson, 475 U.
S., at 303: Employees must receive "sufficient information to gauge
the propriety of the union's fee," id., at 306; the union must give
objectors "a reasonably prompt opportunity to challenge the amount
of the fee before an impartial decisionmaker," id., at 310; and any
amount of the objector's fee "reasonably in dispute" must be held
in escrow while the challenge is pending,
ibid.
B
The Court of Appeals held that
Hudson's procedural
requirements transfer fully to employment relations governed by the
RLA, 108 F. 3d, at 1419, and the parties have not
875
challenged that determination.3 We therefore turn directly to
the question presented: When a union adopts an arbitration process
to comply with
Hudson's "impartial decisionmaker"
requirement, must agency-fee objectors pursue and exhaust the
arbitral remedy before challenging the union's calculation in a
federal-court action?
In his concurring opinion in
Hudson, Justice White
(joined by Chief Justice Burger) answered that question "yes." He
stated: "[I]f the union provides for arbitration and complies with
the other requirements specified in our opinion, it should be
entitled to insist that the arbitration procedure be exhausted
before resorting to the courts." 475 U. S., at 31lo The Court's
opinion did not comment on that unelaborated assertion, however, so
the issue remains live for the decision we now reach. The Court of
Appeals recognized that "Justice White raised a legitimate
practical concern," but found "no
legal basis for
forcing into arbitration a party who never agreed to put his
dispute over federal law to such a process." 108 F. 3d, at 1421
(emphasis in original). We agree, and decline to read
Hudson
as a decision that protects nonunion members at a cost-delayed
access to federal court-they do not wish to pay.
ALP A urges extension of the discretionary exhaustion-ofremedies
doctrine to agency-fee arbitration. See Brief for Petitioner 19
(citing
McCarthy v.
Madigan, 503 U. S. 140, 144 (1992)
("[W]here Congress has not clearly required exhaus-
3 See
Lehnert v.
Ferris Faculty Assn., 500 U. S. 507, 516 (1991)
("[T]he RLA cases necessarily provide some guidance regarding what
the First Amendment will countenance in the realm of union support
of political activities through mandatory assessments."); id., at
555 (SCALIA, J., concurring in judgment in part and dissenting in
part) ("good reason to treat" statutory agency-fee cases as
reflecting First Amendment principles articulated in
Abood).
But cf.
Price v.
International Union, UAW, 927 F.2d
88, 92
(CA2 1991)
(Hudson's "heightened
procedural safeguards" do not apply to agency-fee cases involving
private employers governed by the NLRA).
876
tion, sound judicial discretion governs.")).4 But a principal
purpose of that doctrine is not relevant here. "[T]he exhaustion
doctrine recognizes the notion, grounded in deference to Congress'
delegation of authority to coordinate branches of Government, that
agencies, not the courts, ought to have primary responsibility for
the programs that Congress has charged them to administer."
Id., at 145. ALPA seeks exhaustion not of an administrative
remedy established by Congress but of an arbitral remedy
established by a private party. Ordinarily, "arbitration is a
matter of contract and a party cannot be required to submit to
arbitration any dispute which he has not agreed so to submit."
Steelworkers v.
Warrior &
Gulf Nav. Co.,
363 U. S. 574,
582 (1960); see also
First Options of Chicago, Inc. v.
Kaplan, 514 U.
S. 938, 942 (1995) ("a party who has not agreed to arbitrate
will normally have a right to a court's decision about the merits
of its dispute").
The Union, it is true, acted to comply with this Court's
decision in
Hudson rather than out of its own unconstrained
choice. But
Hudson's requirement of "a reasonably prompt
4
Amicus National Education Association (NEA) argues that
the question before us is one not of exhaustion but of ripeness.
Illegality depends on the
spending of compelled agency fees
for ideological purposes, NEA maintains, not simply the initial
collection of those fees; hence, an objector has no basis for
filing suit until the arbitrator has ruled and the disputed amounts
are released from escrow. See Brief for National Education
Association as
Amicus Curiae 18-20. Petitioner, in its reply
brief, endorses NEA's argument. See Reply Brief 16-17. The
contention, however, is inconsistent with
Teachers v.
Hudson, 475 U.
S. 292 (1986). There, we rejected the union's position that
"because a 100% escrow completely avoids the risk that dissenters'
contributions could be used improperly, it eliminates any valid
constitutional objection to the procedure and thereby provides an
adequate remedy."
Id., at 309. We held that even if the
entire agency fee remained in escrow throughout arbitration,
objectors (who are deprived of the use of what may be their
property pending the outcome of the dispute) had an independent,
enforceable interest in the prompt and proper resolution of their
objections.
877
decision by an impartial decisionmaker," 475 U. S., at 307, aims
to protect the interest of objectors by affording them access to a
neutral forum in which their objections can be resolved swiftly;
nothing in our decision purports to compel objectors to pursue that
remedy. See
ibid. ("The nonunion employee, whose First
Amendment rights are affected by the agency shop itself and who
bears the burden of objecting, is entitled to have his objections
addressed in an expeditious, fair, and objective manner."). Indeed,
Hudson's emphasis on the need for a speedy remedy weighs
against exhaustion, even through an arbitration procedure intended
to be expeditious, as an essential prerequisite to federal-court
consideration of nonmember challenges. See
McCarthy, 503 U.
S., at 146 ("[A]dministrative remedies need not be pursued if the
litigant's interests in immediate judicial review outweigh the
government's interests in the efficiency or administrative autonomy
that the exhaustion doctrine is designed to further." (internal
quotation marks omitted)). We resist reading
Hudson in a
manner that might frustrate its very purpose, to advance the swift,
fair, and final settlement of objectors' rights.
Against these concerns, ALPA stresses the asserted efficiency
gains of requiring objectors to proceed to arbitration first. The
Union asserts: "It is difficult to conceive how a court could
fairly try an agency-fee dispute
ab initio, given that the
plaintiffs who challenge an agency-fee calculation are not required
to state any grounds whatsoever for their challenge." Reply Brief
6-7. Arbitration, in ALPA's view, will serve a useful, if not
essential, role in defining the scope of the dispute. See Brief for
Petitioner 21-23; Reply Brief 4-7.
ALPA overstates the difficulties of holding a federal-court
hearing without a preparatory arbitration. We have held that "the
nonunion employee has the burden of raising an objection, but that
the union retains the burden of proof."
878
Hudson, 475 U. S., at 306. And when pursuing the union's
internal remedies, an objector may preserve the right to
subsequent judicial relief without "indicat[ing] to the Union the
specific expenditures to which he objects."
Abood,
431 U. S., at 241 (emphasis in original). In stating that the
"nonmember's 'burden' is simply the obligation to make his
objection known,"
Hudson, 475 U. S., at 306, n. 16, however,
we did not hold that a federal-court plaintiff can file a generally
phrased complaint, then sit back and require the union to prove the
"germaneness" of its expenditures without a clue as to "which of
its thousands of expenditures" the objectors oppose. Reply Brief 4.
Agency-fee challengers, like all other civil litigants, must make
their objections known with the degree of specificity appropriate
at each stage of litigation their case reaches: motion to dismiss;
motion for summary judgment; pretrial conference.
The very purpose of
Hudson's notice requirement is to
provide employees sufficient information to enable them to identify
the expenditures that, in their view, the union has improperly
classified as germane. See 475 U. S., at 306-307. With the
Hudson notice, plus any additional information developed
through reasonable discovery, an objector can be expected to point
to the expenditures or classes of expenditures he or she finds
questionable. Although the union must establish that those
expenditures were in fact germane, the shifted burden of proof
provides no warrant for blocking dissenting employees from bringing
their claims in federal court in the first instance, if that is
their preference. The answer to ALP A's efficiency concern lies in
conscientious management of the pretrial process to guard against
abuse, not in a judicially imposed exhaustion requirement.
Moreover, the degree to which an exhaustion requirement would
reduce the burden on the courts is uncertain. To the extent that
the arbitrator does not sustain an objection to the union's fee
calculation, exhaustion would require the ob-
879
jector to traverse two layers of procedure rather than one.5
Furthermore, if the union's arbitration process in fact operates to
provide an inexpensive, swift, and sure remedy for agency-fee
errors, dissenting employees may avail themselves of that process
even if not required to do so. Cf.
Patsy v.
Board of
Regents of Fla., 457 U. S. 496, 513, n. 15
(1982) (under a " 'free market' system" of no required exhaustion,
"litigants are free to pursue administrative remedies if they truly
appear to be cheaper, more efficient, and more effective").
The Union may, nonetheless, face the prospect of defending its
fee calculation simultaneously in judicial and arbitral fora. We
note that unions do not lack means to limit the expense and
disruption occasioned by multiple fee challenges: objections may be
consolidated for consideration in a single arbitration, for
example, and agency-fee litigation may be consolidated in a single
district court. See 28 U. S. C. §§ 1404, 1407. But genuine as the
Union's interest in avoiding multiple proceedings may be, that
interest does not overwhelm objectors' resistance to arbitration to
which they did not consent, and their election to proceed
immediately to court for adjudication of their federal rights.6 We
hold that, unless they agree to the procedure, agency-fee objectors
may
5 Inevitably limiting the utility of exhaustion in relieving the
courts of the task of adjudicating agency-fee disputes is the
nonbinding character of
Hudson arbitration, a characteristic
on which the dissent centrally relies. See
post, at 880,
881, 882, 883-885.
6 Our recognition of the right of objectors to proceed directly
to court does not detract from district courts' discretion to defer
discovery or other proceedings pending the prompt conclusion of
arbitration. See,
e. g.,
Landis v.
North American
Co., 299 U. S.
248, 254-255 (1936) ("[T]he power to stay proceedings is
incidental to the power inherent in every court to control the
disposition of the causes on its docket with economy of time and
effort for itself, for counsel, and for litigants. How this can
best be done calls for the exercise of judgment, which must weigh
competing interests and maintain an even balance.").
880
not be required to exhaust an arbitration remedy before bringing
their claims in federal court.
***
For the reasons stated, the judgment of the Court of Appeals for
the District of Columbia Circuit is
Affirmed.
JUSTICE BREYER, with whom JUSTICE STEVENS joins, dissenting.
In
Teachers v.
Hudson, 475 U. S. 292 (1986),
this Court
held that
"the constitutional requirements for the Union's collection of
agency fees include an adequate explanation of the basis for the
fee, a reasonably prompt opportunity to challenge the amount of
the fee before an impartial decisionmaker, and an escrow for
the amounts reasonably in dispute while such challenges are
pending." Id., at 310 (emphasis added).
The Court added that, if the "impartial decisionmaker" is an
arbitrator, that arbitrator's decision would not bind a court in a
subsequent court action.
Id., at 308, n. 21 ("arbitrator's
decision would not receive preclusive effect in any subsequent §
1983 action"). Cf.
ante, at 874-875, and n. 3 (treating
procedural requirements set forth in
Hudson, a 42 U. S. C. §
1983 case, as "transfer[ing] fully" to Railway Labor Act cases such
as this one).
I read
Hudson as implying approval, not disapproval, of a
union rule that would require initial participation in "prompt,"
but non-binding, arbitration. Indeed, Justice White, joined by
Chief Justice Burger, concurring in the Court's judgment and
opinion in
Hudson, specifically stated that
"if the union provides for arbitration and complies with the
other requirements specified in our opinion, it should
881
be entitled to insist that the arbitration procedure be
exhausted before resorting to the courts." 475 U. S., at 31lo
I agree with Justice White that the law permits the Union to
insist upon compliance with that internal procedure-as long as the
required arbitration is nonbinding and conducted expeditiously by
an "impartial" arbitrator, as
Hudson requires.
Id.,
at 310.
The Court majority quotes with approval the Court of Appeals'
statement that Justice White's concern, while" 'practical,'" lacked
a "'legal basis.'"
Ante, at 875 (quoting
108 F.3d
1415, 1421 (CADC 1997)) (emphasis deleted). But
Hudson
itself, and the case law upon which
Hudson rests, provide
more than adequate legal support for Justice White's basic
position. Those cases make clear that
Hudson's requirements
do not rest solely upon the interests of dissenting employees, but,
rather, grow out of a judicial effort to balance two distinct
interests.
One interest is the Union's concern that nonmember employees
share the cost of the collective bargaining from which they
benefit. See
Abood v.
Detroit Bd. of Ed., 431 U. S.
209, 222 (1977) (imposition of agency fees "is constitutionally
justified by the legislative assessment of the important
contribution of the union shop to the system of labor relations
established by Congress");
Railway Clerks v.
Allen,
373 U. S. 113,
122 (1963) ("no decree would be proper which appeared likely to
infringe the unions' right to expend uniform exactions under the
union-shop agreement"); Ma
chinists v.
Street,
367 U. S. 740,
761-764 (1961); see also
Lehnert v.
Ferris Faculty
Assn., 500 U. S.
507, 520-521 (1991). The other interest is that of the
nonmember in
not paying for "nongermane" union activity,
which activity may promote ideological or political views that the
nonmember does not share.
Lehnert, supra, at 515-519;
Abood, supra, at 233-236;
Allen, supra, at 118-121;
Street, supra, at 765-769.
882
This Court has interpreted the relevant labor statutes, in light
of the Constitution's requirements, as requiring procedures that
"protect
both" these "interests to the maximum extent
possible without undue impingement of one on the other."
Street,
supra, at 773 (emphasis added). Indeed,
Hudson itself
makes clear that procedural requirements " 'must'" seek as their
"'objective'" to "'preven[t] compulsory subsidization of
ideological activity by employees who object thereto
without
restricting the Union's ability to require every employee to
contribute to the cost of collectivebargaining activities.'"
475 U. S., at 302 (quoting
Abood, supra, at 237) (emphasis
added). The mandatory, but nonbinding, arbitration requirement at
issue here satisfies these objectives, for it amounts to a
reasonable elaboration of
Hudson's own mandate: that the
Union provide "a reasonably prompt opportunity to challenge the
amount of the fee before an impartial decisionmaker." 475 U. S., at
310.
First, consider the matter from the Union's perspective.
The "arbitration first" requirement seems reasonable because it
lowers the costs of resolving agency fee disputes and makes their
resolution manageable. As this case illustrates, different groups
of nonmember dissenters with different motivations for objecting
may proceed in different forums. Without the "arbitration first"
rule, they might do so simultaneously. Judge and arbitrator,
perhaps subject to different discovery requests, obtaining somewhat
different information, hearing different arguments, operating under
different rules of procedure and evidence, and exercising different
judgments (each without knowledge of the other), could well
determine differently costs and complex expenditure relationships,
thereby reaching different, even conflicting, conclusions.
Amicus National Education Association says that this "would
be the most expensive and burdensome system imaginable." Brief for
National Education Association as
Amicus Curiae 14.
Amicus AFL-CIO adds that the "costs of defending such
litigation" (which may involve no
883
more than $50 or so for any individual dissenter, see Tr. of
Oral Arg. 10) "can easily consume the union's agency fee receipts."
Brief for AFL-CIO as
Amicus Curiae 14, n. 5. The Court
itself recognizes as "[g]enuine" the Union's "concern" about
defending "its fee calculation simultaneously in judicial and
arbitral fora."
Ante, at 878, 879.
Second, consider the matter from the perspective of the
dissenting employee. The Court's decision, rejecting the Union's
rule, may help to protect the ideological interests of a few of
those employees, but only a few, and then in a way that does
not offset the corresponding harm caused the Union. That is
because "arbitration first" does not mean serious delay, for the
arbitration must begin promptly and proceed expeditiously. See
Hudson, supra, at 307. Moreover, nonbinding arbitration may
resolve the dispute to the satisfaction of some dissenting
employees, perhaps those whose objections rest less upon ideology
and more upon a desire to minimize the fee they must pay. See
Gilpin v.
AFSCME, 875 F.2d
1310, 1313 (CA7 1989) (noting that many objectors are "free
riders" seeking representation at the lowest cost possible);
Weaver v.
University of Cincinnati, 970 F.2d
1523, 1530 (CA6 1992) (same);
Kidwell v.
Transportation Comm. Int'l Union, 946
F.2d 283, 304-306 (CA4 1991) (same).
Nor will trying arbitration first prejudice the cause of the
remaining unsatisfied objectors. The nonbinding arbitration process
may deprive objectors of their money for a brief additional time,
but the disputed fees must remain unspent in escrow during the
arbitration proceedings.
Hudson, supra, at 305, 310.
Nonbinding arbitration also leaves the objectors free to press
their claims in a later court actionif the arbitration's result
leaves them dissatisfied. And, as the Union conceded at oral
argument, the judge in that later action, though informed by the
arbitrator's decision, would not accord it any special legal
weight. Tr. of Oral Arg. 16, 20-21; see also
Hudson, supra,
at 308, n. 21 ("arbitrator's decision would not receive preclusive
effect in any subse-
884
quent § 1983 action"). Cf.
Skidmore v.
Swift &
Co., 323 U. S.
134, 140 (1944) (administrative agency, through its
interpretations, may have the "power to persuade, if lacking power
to control"). In other words, the objecting dissenter, though
briefly delayed, could proceed in court and on a clean slate. See
Hensler, Court-Ordered Arbitration: An Alternative View, U. Chi.
Legal Forum 399, 401 (1990) (describing differences between
mandatory non-binding arbitration over agency fee calculations, and
traditional mandatory
binding arbitration).
From the courts' perspective too, nonbinding arbitration can
prove helpful. Insofar as it settles matters to the parties'
satisfaction, it avoids unnecessary, perhaps timeconsuming,
judicial investigation of highly complex union accounts and expense
allocations. Cf.
Allen, 373 U. S., at 122 (describing
difficulties surrounding "judicially administered relief" for
agency fee objectors, as compared with "internal union remedy");
Abood, 431 U. S., at 240 (same).
The upshot is that the "arbitration first" rule "prevent[s]
compulsory subsidization of ideological activity" without unduly
"restricting the Union's ability" to collect a legitimate agency
fee. Consequently, neither the First Amendment, nor any statute, as
interpreted by this Court, prohibits the Union's insistence upon
that rule.
I fear that the majority is led to a different conclusion
through use of analogies that, in my view, do not govern the
circumstances before us. First, the Court analogizes the
arbitration at issue here to binding arbitration often found in
contracts, including labor contracts, where arbitration is legally
anchored in the consent of the parties.
Ante, at 876. But
"consent" is not relevant to the legal justification for the
"arbitration first" rule before us. Rather, that rule finds its
legal anchor in the Union's legal authority (indeed, obligation)
under
Hudson to impose internal procedures that permit
collection of agency fees, without undue infringement of objectors'
constitutional rights. I have explained above
885
why the rule at issue here satisfies
Hudson's
requirements. If one needs an analogy, I would find it, not in
consensual arbitration, but in court rules that require parties to
try nonbinding arbitration before they pursue a case in court. See,
e. g., 28 U. S. C. §§ 651-658 (authorizing district courts
to refer certain types of civil actions to arbitration);
Alternative Dispute Resolution, Local Rules 2-3, 4-2 (ND Cal.
1998); see also B. Meierhoefer, Federal Judicial Center,
Court-Annexed Arbitration in Ten District Courts (1990).
Second, the Court describes the Union's proposed "arbitration
first" rule as an "extension of the discretionary
exhaustion-of-remedies doctrine."
Ante, at 875. But whether
that particular doctrine offers legal justification in this case is
beside the point. The "arbitration first" rule amounts to an
elaboration of the obligations set forth in
Hudson. Those
obligations rested upon the substantive law that permits collection
of agency fees interpreted in light of the competing demands of the
First Amendment.
Hudson decided that this law required the
courts to craft a mandatory, nonbinding mechanism for speedy
dispute resolution. Exhaustion principles did not prevent the Court
from doing so. Why then should those principles prevent the Court
from elaborating upon
Hudson's requirements, by permitting a
union to impose a reasonable "arbitration first" rule of the kind
before us?
I note one additional matter. The Court's opinion refers to the
"pilots ... proceed[ing] at once in federal court."
Ante, at
869. The Court does not decide, however, whether a federal court
can await the conclusion of an expeditious arbitration before it
proceeds, for example, with discovery.
Ante, at 879, n. 6.
Should it await arbitration's conclusion, the court would be able
to take advantage of any settlement or narrowing of issues that the
nonmandatory arbitration proceeding produced. Doing so would
alleviate many of the concerns that I have expressed in this
opinion. See
supra, at 882-884.
886
Even so, the question before us is whether the Union can insist
upon prior recourse to that form of arbitration. For the reasons
stated, I believe such a requirement is consistent with, and a
reasonable extension of, this Court's decision in
Hudson.
I therefore dissent.
887
The next page is purposely numbered 1001. The numbers between
886 and 1001 were intentionally omitted, in order to make it
possible to publish the orders with permanent page numbers, thus
making the official citations available upon publication of the
preliminary prints of the United States Reports.
888
MARCH 3, 1998
Miscellaneous Order
No. A-657. FRANCIS, WARDEN V. FRANKLIN ET AL., NEXT FRIENDS FOR
BERRY. Application to vacate stay of execution of sentence of death
entered by the United States District Court for the Southern
District of Ohio on February 27, 1998, presented to JUSTICE
STEVENS, and by him referred to the Court, denied.
MARCH 4, 1998 Dismissal Under Rule 46
No. 97-7427. ALTSCHUL V. TEXAS. Ct. Crim. App. Tex. Certiorari
dismissed under this Court's 46.
MARCH 6, 1998
Certiorari Denied
No. 97-8069 (A-644). ARNOLD V. MOORE, DIRECTOR, SOUTH CAROLINA
DEPARTMENT OF CORRECTIONS, ET AL. Sup. Ct. S. C. Application for
stay of execution of sentence of death, presented to THE CHIEF
JUSTICE, and by him referred to the Court, denied. Certiorari
denied.
MARCH 9, 1998 Certiorari Granted-Vacated and Remanded
No. 97-669. CITY OF BELLEVILLE V. DOE ET AL., BY THEIR PARENTS
AND NEXT FRIENDS, DOE ET UX. C. A. 7th Cir. Certiorari granted,
judgment vacated, and case remanded for further consideration in
light of
Oncale v.
Sundowner Offshore Services, Inc.,
ante, p. 75. Reported below:
119 F.3d
563.
Miscellaneous Orders. (See also No. 97-7300,
ante,
p. 206.)
No. M-46. BENOIT V. MEDICAL CENTER OF DELAWARE, INC., CHRISTIANA
HOSPITAL; and
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